Hiscox news - issue 13

Hiscox appoints new CEO to its London Market business

Hiscox has appointed Kate Markham as CEO for its London Market business.

Markham has been at Hiscox for five years and most recently was Managing Director of its direct to consumer operations in the UK. Prior to Hiscox, Markham was Head of International Enterprise at Vodafone.

“At Hiscox and Vodafone Kate has proven her ability to build profitable businesses in highly competitive markets," says Hiscox Group’s CEO Bronek Masojada. "She will be a modernising force for our operations and culture, and relentless in making the most of the changing market and the opportunity it presents.”

The CEO of Hiscox London Market is a new position, working closely with Paul Lawrence, who remains Chief Underwriting Officer of Hiscox London Market and Joint Active Underwriter for Syndicate 33. Both Markham and Lawrence will sit on the Hiscox Ltd executive committee.

To view the full press release please click here

EX-GCHQ Director Robert Hannigan joins Hiscox

Hiscox UK has appointed the former Director of GCHQ Robert Hannigan as a Special Advisor on Cyber Security.

Hannigan, credited with developing the UK’s first Cyber Security Strategy and setting up the National Cyber Security Centre, will work closely with Hiscox and its specialist cyber division to provide market intelligence, staff training and inform the development of new and existing cyber products.

“The risks that cyber criminals pose, both to businesses and individuals in the UK are significant and sophisticated," says Hannigan, who will have the title of Special Advisor at Hiscox UK and Ireland. "Cyber attacks are intrusive, costly and disruptive, which is why businesses and the public must be proactive in establishing a defence against them. In addition, the organisations that protect us – from insurers and software providers to UK regulators – must also evolve their understanding and defence against cyber crime, and the sharing of knowledge through partnerships like this is central to that."

To view the full press release please click here

FloodPlus and Jack Bryan shortlisted for awards

Hiscox’s FloodPlus – a new flood product launched in 2016 for US homeowners – has been shortlisted as a finalist in the NIIT Insurance Initiative of the Year category at this year’s Insurance Day London Market Awards. In addition, Deputy Cargo Underwriter Jack Bryan has also been named in the Rising Star category.

FloodPlus has generated significant new premium since it was launched, showing a clear need in the US market for broader and often cheaper coverage than the National Flood Insurance Programme while offering an easier purchasing mechanism and better claims process.

Jack Bryan took only a year to win promotion to deputy cargo underwriter and has been instrumental in building Hiscox’s cargo account, while also leading the representation of the under-35s in the Joint Cargo Committee.

The Insurance Day awards ceremony takes place on 23rd November at the Hilton London Bankside where the winners will be announced at a glittering gala dinner.  

Beating the drum for London - the LMG's CEO, Christopher Beazley talks to HGI

Tell us more about the 'Telling the London Market Story' campaign recently launched by the London Market Group

The idea is to help answer the "why London?" question for our existing and potential clients. We're looking to articulate what it is that London makes possible. Ships don't leave port and planes don't take off without the London Market – London writes 60% of the global aviation premium. Also, the hurricanes in the past few months have really shown what we do to help get clients back on their feet.

We also want to energise the London Market community of 52,000 and reinvigorate their sense of pride in where they work, while uniting us all behind a common set of words about why clients need to come to London. Many of the people working here in the market are visiting and speaking to clients and potential clients every day – that has to be the most effective means of getting our message out there. 

What progress is being made in the other work streams set out by the LMG?

In the modernisation stream, we've made some great progress, including reducing our coverholders’ audits to one or two a year. Overall, the number of audits has reduced by 1500 a year. We have also rolled out PPL – the London Market’s electronic placing platform – for three lines of business, binding over 10,000 risks through the platform in the past 12 months. A new version of PPL was released in early October and I expect to see a material uptick in the number of users.

In terms of talent, we launched London Insurance Life earlier this year to illustrate the wonderful careers available in this market. Based around an Instagram campaign, London Insurance Life profiles people who work in the market, how they found their way here, what it is they do and their views of it as a place to work. It highlights the real diversity of roles in the market. We also have 55 London Insurance Life Ambassadors attending careers fairs at schools and universities, and sharing their views on what a great place the London Market is to work.

For the business environment, we published a Brexit roadmap in March and have set up a taskforce – including 20 participants from right across the market – to work with the government on what it is the London Market wants to see out of the Brexit negotiations.

The government has also now published its ILS framework, and the regulations have been laid before Parliament. We anticipate the framework, which will allow London to host ILS vehicles, will come into force before 2018. 

The last London Matters revealed that London’s premium income from reinsurance and emerging declined between 2013 and 2015. What can be done to arrest this decline?

All four of the LMG's work streams speak to how we can arrest that decline while acknowledging the challenging conditions. Take emerging markets, for example. If people don't know what the London Market does then they're not going to come to us for their risk and insurance needs, so we need to be out there telling that story. We also need people working here that understand regional and local cultures, and speak the languages. On the modernisation programme, we have to make sure we are as efficient as possible if we are going to attract future business here. 

Diversity was also shown to be an issue, particularly for female directors. Do you see any encouraging signs?

I see diversity as a very broad spectrum. Gender, nationality and ethnicity are all key, but we also need to look at whether we have the diversity of skills. Do we have the diversity of mindset? Do we have people who are open to change, will challenge how we do business and are open to doing things differently?

Talking to LMG members, I see diversity as an absolute priority at board level. There is some great work going on, such as the Dive-In festival, which was well attended with great speakers. There is still a long way to go and we need to continue focusing on tangible actions. There are some good initiatives around the market, which I think should be showcased and shared, but I think there’s also plenty we could learn from other industries, such as banking. 

Have you had the support for change you would hope for from the wider London Market?

We have a full time team of six and a board of 18 people. Everything that we at the LMG do is achieved through the team but with the support of a huge number of people from the market: the sponsors or members of the steering groups, or the market associations, or others from the 350 businesses who support us. I don't know of any other market or industry that comes together for the good of the market in the way that we do in London.

What progress would you hope to have seen a year from now?

In January I was in New York talking to a RIMS symposium of 20 or so risk managers, as part of the research we've been doing into the London Market brand work. If, in a year's time, I spoke to those same risk managers again and heard consistent messages as to why they should be coming to London, I think that would be really positive.

The ILS framework will be in place by then and it will be great to see some of the innovative ways that people have used that to bring additional business to London and create new products.  Also, PPL will have been rolled out across all classes, and we will have made significant progress to a world where paper is no longer seen as an acceptable way to do business.

How have you personally found the challenge since taking up the CEO role?

The Brexit referendum happened during the recruitment process for this role, which made me pause. But, after reflecting on it for a couple of days, I decided it reinforced how important it was for the London Market to come together with one voice. I didn't see this job as a risk for me personally but as a great opportunity to be a part of a really successful market.   

London is bigger than the next three insurance hubs combined [in terms of GWP], we have an incredible foundation, breadth of expertise, and a great history. We’re in a fantastic position. To help confront some of the challenges we face and help articulate the positives is a challenge that has really resonated with me. I find the London Market is an easy thing to get passionate about. The fact people are willing to give their time and energy indicates there is a lot of support for what we're doing.



Q3 2017 Interim Management Statement

Hamilton, Bermuda (7 November 2017) – Hiscox Ltd (LSE:HSX), the international specialist insurer, today issues its Interim Management Statement for the first nine months of the year to 30 September 2017.

Gross written premiums grew by 12.4% to £2,088.8 million (2016: £1,858.2 million) reflecting a strong performance across all segments, particularly from Hiscox USA where premiums grew 29% in constant currency. 

Bronek Masojada, Group Chief Executive Officer, commented: “2017 is turning out to be an historic year for catastrophes and Hiscox’s first priority is to help our customers get back on their feet. Our long-held strategy of balance and diversity was built for this environment, as our retail businesses provide stability when volatility impacts the big-ticket areas. Our balance sheet is strong, and we are in a good position to capitalise on changes in the market.”

Gross Written Premiums for the period:



Our early estimates for Hurricanes Harvey and Irma have proved to be prudent. As a result, we now estimate combined net claims for Hurricanes Harvey, Irma and Hurricane Maria of US$225 million against a previous estimate US$225 million for Harvey and Irma alone. This is based on an insured market loss of US$25 billion for Harvey (excluding the government backed National Flood Insurance Program), US$35 billion for Irma, and US$30 billion for Maria.

Claims arising from the Mexico earthquakes and California wildfires are not expected to be material for the Group.


The recent catastrophes are estimated to have cost the industry $100 billion and follow a decade of rate reductions. Therefore, it is not surprising that we are seeing signs of a hardening market. Price corrections are occurring in loss-affected and loss-exposed US property lines business where we are seeing increases of between 10% and 50% and sometimes more. In other London Market insurance lines, momentum is building ahead of the busy renewal season and reductions are coming to an end.

For reinsurance, we anticipate double-digit increases in rates for US catastrophe-exposed business at the important January renewals, with higher increases on loss-affected accounts and retro business.

Rates in our retail business are broadly flat with significant rises in US commercial property.


The investment result to 30 September 2017 was 1.6% on a non annualised basis. The third quarter proved to be a challenging one for bond investors as central banks continued to prepare the market for a gradual move towards a less accommodative monetary policy. The fixed income portfolios delivered modest positive returns overall in the period largely due to their allocation to non-government bonds. Our risk assets have made further gains as equity markets benefited from a more optimistic outlook for global growth. Invested assets totalled £4.4 billion at the end of September, with asset allocation remaining largely unchanged from the end of June.

Hiscox Retail

Hiscox UK and Ireland

Hiscox UK and Ireland increased gross written premiums by 12.2% in constant currency to £417.4 million (2016: £369.4 million). This growth was driven by all regions and all distribution channels.   

In our broker channel, the professions and specialty commercial business is performing well, with an expanded appetite for larger risks attracting new business. In the direct-to-consumer channel, we have seen good growth from our core direct commercial and home portfolios.

The power of the Hiscox brand has been an important driver of our growth. In the UK we have returned to TV with a sponsored Channel 4 series ‘Best Laid Plans’ to support our renovations and extensions product for home insurance customers. 

Hiscox Europe

Hiscox Europe performed well, growing gross written premiums by 11.2% in constant currency to €193.4 million (2016: €173.9 million).

This was driven by a strong performance across all regions, with commercial lines in Germany, Spain and the Netherlands performing particularly well. 

Hiscox Europe is benefiting from a focus on products where we have strong specialist expertise and a solid reputation, particularly in cyber and classic cars.  

Hiscox Special Risks

Hiscox Special Risks reduced by 2.3% in constant currency to US$94.1 million (2016: US$96.4 million).  

New business growth has been challenging, however Security Incident Response, the broad security-based product for corporates and private clients we launched earlier in the year, has been well received and is gaining traction. After a successful roll out in the US, Spain and Japan, we expect to introduce the product into other markets over time.

Hiscox USA

Hiscox USA delivered another strong performance, growing gross written premiums by 29.2% in constant currency to US$518.0 million (2016: US$400.9 million) driven by growth in general liability and professional risks. 

The direct and partnership business has performed particularly well, with strong partnership distribution and an increased effectiveness in marketing activity. This area has also benefited from an expansion of underwriting appetite into adjacent small business segments such as food trucks.

Hiscox USA is also seeing significant rate increases on new and renewal business for commercial property, a trend we expect to continue in Q4. 


DirectAsia has seen gross written premiums reduce by 24.3% in constant currency to £8.4 million (2016: £10.2 million). This is partly due to the on-going impact of the sale of the Hong Kong business in August 2016, as well as the extremely competitive environment in Singapore.

We are making progress with investment in the brand. In Singapore, marketing and product innovation continues to differentiate us. We have launched a new partnership with Shell which is yielding encouraging results, as well as a number of new features in our core product range, including NCD60 for car customers and cover for motorcycle delivery riders. In Thailand we have launched a new TV campaign to drive volume. 

Hiscox London Market

Our London Market business reduced during the period as planned with gross written premiums decreasing by 17.1% in constant currency to £463.0 million (2016: £520.2 million).

This reduction is in line with previous guidance and follows our decision to re-focus the division over the last year. We have reduced in areas where margins have eroded, such as healthcare, aviation, big-ticket property, and extended warranty, while targeting growth in marine cargo, general liability, product recall and US flood.

Hurricane Harvey was an historic flood event and exposed the lack of flood cover in the US. In 2016 we launched FloodPlus, an alternative to the National Flood Insurance Program (NFIP), in anticipation of deregulation in the US flood market. Harvey has taught us a lot about the responsiveness of this product and we have seen strong increase in demand. We believe the opportunity to write more US flood business is significant and we are well positioned to serve more customers.

In order to participate fully in any widespread market turn, we have secured Lloyd’s approval to increase the capacity of Syndicate 33 by £450 million to £1.6 billion. As a result of the improving environment, we are expecting to return Hiscox London Market to growth in 2018.

Kate Markham, Managing Director Hiscox Direct in the UK, has been appointed to the new position of Chief Executive Officer of Hiscox London Market, where she will work closely with Chief Underwriting Officer Paul Lawrence.

Hiscox Re & ILS

Gross written premiums increased by 8.7% in constant currency to US$705.9 million (2016: US$649.2 million) driven by on-going growth in Hiscox Re ILS funds.

Property catastrophe reinsurance makes up over 60% of GWP for Hiscox Re & ILS where, following the Hurricane activity in Q3, we are seeing signs of material hardening of rates with some risks expected to rise by 30% in loss-affected areas. The wildfires in California are also putting upward pressure on US renewal rates.

In the third quarter, Hiscox Re launched FloodXtra, our new US flood product which reinsures personal lines carriers. FloodXtra complements FloodPlus, and helps insurers address the coverage gap in areas underserved by the NFIP.

Hiscox Re ILS funds reached $1.35 billion AUM in the period. 


As we have said previously, Brexit is a structural rather than strategic event for Hiscox. Our new European insurance company, Hiscox S.A., has been formally incorporated in Luxembourg where we have started to build a small local team. Subject to final regulatory approval, we are on track to start writing into the new carrier from Q2 2018.

Proposed US Tax reform

Recently the US House Committee on Ways and Means released a tax reform bill which aims to lower business and individual tax rates and modernise US international tax rules. Among many measures, the draft bill seeks to levy a 20% excise tax on payments made to foreign affiliates. This measure could have an impact on our internal Group reinsurance arrangements. It is still early days in the legislative process and the final shape of the bill is far from clear. We are following that process through several of our trade association partners and will update the market in due course. 

Functional and reporting currency change

The functional currency of our syndicates and the reporting currency of the Group will change to US dollars effective 1 January 2018. This change will significantly reduce the volatility of the Group’s earnings due to foreign exchange movements, in particular due to translation of foreign currency balances. Given that a significant majority of Group earnings are denominated in US dollars, we believe that this change will give investors and other stakeholders a clearer understanding of Hiscox’s performance over time.  

We will report to the market on this new basis when disclosing the Q1 Interim Management Statement in May 2018. Ahead of our interim results we will publish comparative restated data for Hiscox’s final and interim results of 2017.